Every “death” creates wear and tear on your body. Depending on where you were hit and how you died, your character may require a new body part, which can either be cybernetic or organic. Eventually after too many deaths, your character’s body will just give out, and instead of waking up in a med bay, you’ll be attending the funeral of your fallen character (...).

Because of how Star Citizen works, the death of your character is not as catastrophic as it would be in a traditional RPG. If you want to think about it in terms of RPG conventions, the character that you are leveling up and customizing is really your spaceship. Your avatar is really just a visual representation of your in-game character, and because Star Citizen is skill based, the loss of your character is more a cosmetic and textural outcome, especially as almost all of the assets you’ve worked hard to accumulate pass on to the beneficiary that you specified when creating your original character.

(...)

This will hopefully create a competition between players to see how much they can achieve in the life span of their current characters. The ones that achieve greatness via killing a Star Citizen unique NPC or taking part in a unique event, like discovering a new jump point or system, are recorded in the Galactapedia and become part of the universe lore and history.